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Helmsman explains US and EU Sanctions: What is the Difference?

Maureen Poh, a Director of Helmsman LLC, offers plain practical tips on the differences between US and EU Sanctions and shares some thoughts on what companies could do if they are potentially exposed to sanctioned entities.

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The following article explaining the differences between U.S. and EU sanctions has been written by Maureen Poh, the Director of Helmsman LLC, Singapore. Poh has significant experience with energy-related shipping and commodity-related matters and was cited in Legal 500 as “a key name for charterparty disputes, carriage of goods by sea and cargo claims”:

I am frequently asked about the differences between US and EU sanctions.  For instance, when negotiating sanctions clauses in a contract; or, where the spectre of a breach of sanctions is raised during the performance of a contract.  Commonly asked questions include: if a certain entity is under US sanctions, does it mean that it is similarly caught by EU sanctions?  I am not a US company or citizen, do I have to comply with US sanctions laws?  How will I be penalised for breaching sanctions?  In essence, tell me what I should do in order to comply with sanctions laws.

Unfortunately for businesses (and fortunately for lawyers!), the US-EU sanctions landscape is a minefield, with overlapping and sometimes contradictory sanctions regulations.  The sanctions policies and enforcement of sanctions vary widely between the US and EU.  To illustrate the differences, I discuss below three aspects of sanctions: scope, extra-territorial reach and enforcement.

Scope of Sanctions

For starters, let us look at the scope of sanctions: the list of sanctioned entities differs between the US and the EU.  The US has a far longer list of sanctioned countries, entities and individuals than the EU.  US sanctions may also be implemented relatively quickly, sometimes overnight, by way of Executive Order.  This leads to a situation where a company in a global supply chain may be in breach of one sanctions regime, while at the same time being allowed by another regime to deal with that same entity.  Another example is in respect of sectoral sanctions.  For example, US sanctions against Russia extend to Russia’s oil and gas industries; EU sanctions do not cover most Russian gas projects.

Reach of Sanctions

Another big difference is the reach of sanctions rules: do sanctions laws apply extra-territorially, i.e., do US sanctions laws apply only to US companies and citizens?   US primary sanctions generally restrict or prohibit US companies (including their non-US branches) as well as US citizens, and non-US entities owned or controlled by US persons, from doing business with sanctioned countries, companies or individuals.  This applies regardless of where they are located.  In some instances, US secondary sanctions are more complex, applying to any company or individual in the world that wants to do business in the US, with US companies or individuals, or even non-US persons in possession of or dealing with US-origin goods.  A transaction that involves a US nexus, for instance, the use of the US dollar, might be sufficient for US sanctions to bite.

Contrast this with EU sanctions – EU sanctions generally apply only within the jurisdiction of the EU, i.e., within EU territory; to EU nationals, whether or not they are within the EU; and, to companies incorporated under the laws of an EU Member State whether or not they are within the EU (including branches of EU companies in third countries).  Companies incorporated outside the EU and non-EU nationals are generally not required to comply with EU sanctions, except in respect of business done in whole or in part within the EU.  To add to the complexity of EU sanctions, individual EU Member States may also impose their own domestic sanctions in addition to any imposed by the EU.

Perhaps the most obvious gulf between US and EU sanctions is demonstrated in how the EU tries to block the extra-territorial effect of US sanctions.  In 1996, the EU introduced the “Blocking Regulation” (EC Regulation 2271/96).  It obliges EU residents and companies to refrain from complying with extra-territorial laws that are set out in the Blocking Regulation.  The effect of this is that it allows EU entities to engage in activities with companies and individuals that are lawful in the EU but which might be sanctioned by the US.  In other words, it makes compliance with US sanctions a violation of EU laws.  Little surprise that this only adds to the already confusing situation!

Enforcement of Sanctions

I round off my discussion by touching on another area of difference, which is how breaches of sanctions are enforced.  The US sanctions policy is administered and enforced centrally, by the US Treasury’s Office of Foreign Assets Control (OFAC).  In the EU, each Member State administers and enforces EU sanctions.  This means that they have their own approach to enforcement: some Member States impose criminal penalties, while others only impose civil or administrative penalties.  In addition, in some EU Member States, companies and individuals have an obligation to report to the authorities if they believe there has been a breach of EU financial sanctions; it is a criminal offence in certain instances if they fail to do so.  This obligation does not exist in other Member States.

What should you do?

So, back to the question: what should businesses do in order to comply with sanctions laws?

The answer is to check and double-check, otherwise it will be checkmate to you mate!

While the reality is that no one will be able to ensure compliance with 100% of oftentimes vague, complex and conflicting sanctions laws 100% of the time, you still have to try your best to keep on top of the different global sanctions regimes.

Due diligence is key – companies should check, and monitor, their customers, suppliers and all counterparties, including the end user of the product or service, together with their financiers’ requirements, as financial institutions usually have pretty stringent sanctions compliance regulations.  Due diligence should be carried out not only before the deal but also constant monitoring during the performance or lifetime of the contract.

You should pay attention not only to trading with counterparties who are sanctioned entities, but also companies who are alleged or found to breach sanctions laws, for instance, by trading with a sanctioned third party.  You might in turn be potentially exposed to penalties. It all depends on the type of sanctions – UN mandatory sanctions or unilateral sanctions by individual countries – that the company has breached while taking into consideration the place of incorporation of that company, your jurisdiction of incorporation and where your business is carried out.

Faced with a situation like that, is imperative that you quickly seek legal advice from multiple jurisdictions.  As a rule of thumb, consider the following:

  • the jurisdiction where the breaching company is charged with or convicted of breaching sanctions laws;
  • place of incorporation of that company, if different from the former;
  • the jurisdiction where your business is incorporated. Where it involves a parent company and foreign subsidiary, the countries of incorporation of both parent and subsidiary;
  • the countries where your directors are from; and/or
  • the place where the relevant trade or service is, or is supposed, to be performed.

Appropriate due diligence processes, together with legal advice from relevant jurisdictions are your essential tools to navigate the ever-shifting international sanctions environment.

Maureen Poh can be contacted at:

Phone: +65 6950 8667
E-mail: [email protected]

 

Photo credit: Helmsman LLC
Published: 17 November, 2020

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Alternative Fuels

Yang Ming orders six LNG dual-fuel, ammonia-ready containerships from Hanwha Ocean

Each of the six new vessels will have a capacity of up to 13,650 TEU and feature LNG dual-fuel propulsion and Ammonia Fuel Ready specifications.

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Yang Ming orders six LNG dual-fuel, ammonia-ready containerships from Hanwha Ocean

Taiwanese shipping firm Yang Ming Marine Transport Corporation (Yang Ming) and South Korean shipbuilder Hanwha Ocean on Wednesday (2 September) signed a shipbuilding contract for six 13,000 TEU class LNG dual-fuel container vessels. 

The contract was signed by Dr. Chuck Tsai, Chairman of Yang Ming, and Mr. Charles Kim, CEO of Hanwha Ocean. The vessels are scheduled for delivery between 2028 and 2029. 

They will complement Yang Ming’s existing fleet of 10,000+ TEU vessels and serve as key vessels on East-West services, with deployment flexibility across trade lanes connecting Asia with the East and West Coasts of North America, South America, and the Mediterranean. 

Each of the six new vessels will have a capacity of up to 13,650 TEU and feature LNG dual-fuel propulsion and Ammonia Fuel Ready specifications.

“As Yang Ming transitions toward net-zero emissions, LNG provides a relatively mature and economically viable alternative fuel solution, capable of reducing greenhouse gas emissions by approximately 20%,” the company said. 

“At the same time, ammonia can serve as a carbon-free fuel by utilising converted LNG storage facilities, while offering relatively lower conversion costs and comparatively well-developed supply chains and infrastructure. The Ammonia Fuel Ready design will therefore provide Yang Ming with greater flexibility in responding to increasingly stringent international regulations on greenhouse gas emissions.”

In addition, the vessels will be equipped with Type B LNG fuel tanks with a design pressure of 1.0 bar to enhance the safety and efficiency of LNG operations, together with a range of energy-saving technologies, including Wind Shields, Rudder Bulbs, Pre-Swirl Stators, and Shore Power Systems. Smart ship technologies and cybersecurity protection features will also be incorporated to enhance operational efficiency, safety, and reliability while effectively reducing fuel consumption and greenhouse gas emissions.

Deliveries under Yang Ming’s next-generation fleet optimization plan commenced earlier this year. By 2030, a total of 24 new vessels are expected to enter service. 

This includes 18 LNG dual-fuel vessels—comprising five 15,500 TEU, seven 16,000 TEU, and the six 13,000 TEU vessels under this contract—alongside six 8,000 TEU methanol dual-fuel-ready ships. 

 

Photo credit: Yang Ming Marine Transport
Published: 4 September, 2026

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Alternative Fuels

LR, China’s MARIC unveil tanker concept ready for three future bunker fuels

Both secured AiP for a new 114,000 DWT product and crude oil tanker designed to accommodate future conversion to LNG, methanol or ammonia.

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LR, China’s MARIC unveil tanker concept ready for three future bunker fuels

Lloyd’s Register (LR) and the Marine Design and Research Institute of China (MARIC) on Thursday (3 September) have secured Approval in Principle (AiP) for a new 114,000 DWT product and crude oil tanker designed to accommodate future conversion to LNG, methanol or ammonia.

Announced at SMM 2026, the concept addresses one of the biggest investment challenges facing shipping today: the need to develop vessels and capabilities that can support a range of alternative fuel options and pathways as technologies, infrastructure and regulations evolve.

While LNG is already a mature fuel pathway, methanol and ammonia remain at an earlier stage of development, with questions around global fuel availability, infrastructure development, economics and long-term adoption.

The 114,000 DWT tanker concept has been designed as a product and crude oil carrier that can accommodate future conversion to LNG, methanol or ammonia as technologies, regulations and fuel supply chains mature. By incorporating conversion readiness at the design stage, the concept aims to reduce future retrofit complexity and provide owners with greater confidence when planning long-term fleet investments.

The design concept was reviewed against LR’s July 2026 class rules and regulations, including requirements relating to ships using gases and other low-flashpoint fuels, alongside relevant IACS Common Structural Rules for oil tankers. Final classification and statutory approval remain subject to full compliance with all applicable rules and regulations.

Theo Kourmpelis, Global Business Director for Tankers, Lloyd’s Register, said: “Shipowners are being asked to make major investment decisions today despite continued uncertainty around which fuels will dominate in the decades ahead. Alternative fuel solutions each offer potential pathways to compliance, but fuel infrastructure, regulation and economics continue to evolve at different speeds around the world.

“Designs that preserve flexibility will be critical in helping owners manage risk while preparing for multiple future scenarios.”

Si Nan, Marine & Offshore Marketing Department Vice Director, MARIC, said: “As the industry explores different decarbonisation pathways, shipowners need vessel designs that can adapt alongside technological and regulatory developments. This concept was developed specifically to provide greater fuel flexibility and long-term resilience, allowing owners to respond to changing market requirements without being locked into a single fuel strategy.

“Receiving Approval in Principle from Lloyd’s Register is an important milestone that validates the design concept and supports its future development.”

 

Photo credit: Lloyd’s Register
Published: 4 September, 2026

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Alternative Fuels

DNV: Alternative-fuelled vessel orders hit highest monthly level since October 2024

LNG-fuelled vessels accounted for the vast majority of August activity while the strong summer performance marked a significant acceleration in ordering activity after a relatively slow start to the year.

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DNV: Alternative-fuelled vessel orders hit highest monthly level since October 2024

Latest data from classification society DNV’s Alternative Fuels Insight (AFI) platform alternative-fuelled vessel ordering was strong in August, with 52 new vessels added to the platform.

This is the highest monthly total since October 2024 and follows another active month in July, when 47 vessels were added to the database.

LNG-fuelled vessels accounted for the vast majority of August activity, with 46 orders recorded. The container segment led the way with 30 orders, while the car carrier segment contributed a further 12 LNG-fuelled vessels. In addition, four ethanol-fuelled bulk carriers and two hydrogen-powered bulk carriers were added during the month, as well as one LNG bunker vessel.

The strong summer performance marked a significant acceleration in ordering activity after a relatively slow start to the year. In total, 242 alternative-fuelled vessel orders have been placed in the first eight months of 2026, representing a 27% increase compared with the same period in 2025.

LNG remains the dominant fuel choice, accounting for 63% of all alternative-fuelled vessel orders registered so far this year. Container vessels represent the largest share of these LNG orders (59%), followed by car carriers (30%).

Jason Stefanatos, Global Decarbonization Director at DNV Maritime, said: “The past two months have been particularly strong for alternative-fuelled vessel ordering, with August recording the highest monthly total we’ve seen since October 2024. This has helped lift year-to-date orders to a level well above the same period last year.

“LNG remains the leading fuel choice, driven largely by activity in the container and car carrier segments. These sectors have been among the earliest adopters of alternative fuels, supported by predictable liner operations and increasing demand from cargo owners to reduce emissions across supply chains. 

“For many owners, LNG offers a combination of emissions reductions, fuel availability and future flexibility while the longer-term fuel landscape continues to evolve. 

“At the same time, the latest figures include orders for ethanol- and hydrogen-fuelled vessels, highlighting that owners continue to explore a range of decarbonization pathways. Different segments are making different fuel choices, but the overall level of activity demonstrates continued investment in lower-emission shipping.”

Screenshot 2026 09 04 at 12.29.26 PM Screenshot 2026 09 04 at 12.29.36 PM

 

Photo credit: DNV
Published: 4 September, 2026

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